Study: Immigrants Increase Domestic Workers' Wages

    The influx of immigrants does not take jobs away from the state’s existing workforce, but rather increases domestic workers’ wages, according to a Public Policy Institute of California study released last month.

    During the record-high inflow of immigrants from 1990 to 2004, wages of domestic workers have increased between 3 and 7 percent for workers with at least a high school diploma, and 0.2 percent for workers who have not earned a high school diploma.

    Spearheaded by Giovanni Peri, an associate professor of economics at UC Davis, the study is based on data collected from 1960 to 2004. The report found that immigrants tend to opt for lower-end jobs that require little communication or management skills, such as those including manual labor.

    As part of an expanding labor force, there is a growing need for managers, lawyers and training specialists. Such higher-end jobs then go to the domestic workers who have the language skills and connections that immigrants do not have.

    Simply put, the study concluded that immigrants “”complement”” the state’s other workers, rather than competing with them for similar jobs.

    The researchers further explored the issue, trying to identify the immigrants’ main source of workforce competition.

    The study suggested that immigrants who have previously settled are more inclined to have lower wages than those who have not. Because their skills are limited, these immigrants have to compete with newer immigrants for the same low-skilled jobs. As a result, their wages have declined significantly, approximately 13 to 20 percent.

    Though the study was conducted on immigrants and domestic workers with at least a high school diploma, it found that immigrants who come to the United States armed with more education and who seek more specialized jobs still complement the current workforce.

    “”Most [immigrants] with the Ph.D.s are in math and science, and less in law and less in managerial,”” Peri said. “”They possess more quantitative skills. They still complement the native workers with the specialized skills. For example, more engineers mean more companies and more managers and more lawyers.””

    While the percentages listed in the study demonstrate that immigrants do not displace domestic workers, Peri conceded that the figures will not likely change immigration policies right away because of the longstanding politics surrounding immigration.

    Nevertheless, the report’s findings could still have significant implications for immigrants at some point in the future, particularly in California, where by 2004, immigrants made up about 33 percent of the state’s workforce.

    “”From an economic point of view, immigration in the last 40 years has not harmed the wages, it has helped the wages,”” Peri said. “”Immigration does not hurt natives. These are stories that you hear a lot, immigrants displacing jobs, but this is not the case. People should look more at careful research than at their prejudices.””

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